Consumers to Benefit Most from Amazon-Alibaba Rivalry

Amazon recently launched it’s express same-day delivery services, Prime Now – allowing users in Singapore to place orders for fast delivery on a variety of items. The launch marks the e-commerce giant’s first foray into the Southeast Asian market. The items available to fast delivery include among others, beer, beverages, milk, eggs, fresh produce, dried goods, consumer electronics, toys and baby products. The app which can be downloaded now is available on both on Google’s Play store and Apple’s App store. Prime Now is part of Amazon’s Prime membership service and was launched in December 2014 in New York. To-date, the service is available in more than 50 cities in nine countries, including Berlin, London, Madrid, Rome and Tokyo.

According to the director of Prime Now for Asia Pacific at Amazon, Henry Low, Prime Now is Amazon’s fastest delivery method and there are several delivery options available. For orders below 40 Singapore dollars ($29.48), users pay a S$5.99 delivery fee; orders above S$40 are delivered free in a two-hour delivery window. For those wanting to get their goods within an hour, they pony up S$9.99 per order. “What we’ve done is we have looked at what our Singapore consumers love to have and we’ve worked with hundreds of local vendors and made them available,” said Low. He said currently Amazon was also making this available to non-members in Singapore for a limited period, letting customers try the service for free.

Amazon’s entry into Singapore

“The company is working to launch the Amazon Prime membership service soon in Singapore soon,” he said. Amazon’s entry into Singapore sets up the stage for a potential showdown between Amazon and Chinese tech rival Alibaba, which recently took a controlling stake in regional e-commerce company Lazada. The investment opened up Alibaba’s global footprint in markets like Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam and made it accessible to approximately 23 million active buyers on the Lazada platform. According to Ken Mandel, president for innovation and commerce in Asia Pacific at Publicis Media, a war was brewing – a massive face-off between Alibaba and Amazon. More recently, it was reported that Alibaba was also considering a possible stake in Indonesian e-commerce player Tokopedia.

Southeast Asia is a lucrative market for e-commerce as millions of first-generation internet users are starting to embrace online shopping. Its proximity to China, which has already become a leading market for e-commerce, also makes the region Alibaba’s “backyard,” according to Forrester Senior Forecast Analyst Satish Meena. Among markets outside the United States and China, Meena explained that Amazon already had a sizable presence in Europe and was also doing well in the Indian market. “However, it is unlikely that Amazon will invest as aggressively in Southeast Asia as it has done in India. Instead, they are likely to test the waters in one or two markets to grow the business and and gain customers,” he said. With this stiff competition, in the end, analysts agree that the biggest beneficiary from the Amazon and Alibaba rivalry will be the consumers.